The Government’s revised approach retains the core objective of better targeting superannuation concessions for large balances, but introduces several key modifications:

 

1. Two-Tier Thresholds:

• Earnings on balances between $3 million and $10 million will now be taxed at 30%.

• Earnings on balances above $10 million will attract a 40% tax rate.

 

2. Indexation Introduced:

Both thresholds ($3 million and $10 million) will be indexed to maintain alignment with the Transfer Balance Cap and to reflect inflation over time.

 

3. Realised Gains Only:

The tax will now apply only to realised earnings, removing the controversial inclusion of unrealised gains from the original proposal. This means investors will not be taxed on paper gains for assets that have not been sold.

 

4. Start Date Delayed:

The commencement date has been deferred for one year to 1 July 2026 allowing time for consultation and legislative drafting.